The growing chance that new prime minister Boris Johnson could trigger a chaotic UK exit from
the EU sent sterling tumbling to its weakest point in two years on Monday.
Sterling dropped as much as 1.3 per cent to $1.2230, a level not touched since mid-March
2017 in the aftermath of the triggering of Article 50. It fell by the same margin against the euro to below €1.10, its lowest level since January, as investors repriced the chances of a disruptive exit from the EU.
Downing Street added to the air of pessimism when it said Mr Johnson would not meet EU leaders to discuss a revised deal unless they accepted his preconditions: that the withdrawal treaty be reopened and the controversial Irish backstop scrapped.
Mr Johnson’s spokeswoman said he would not sit down to be “told that the EU cannot possibly
reopen the withdrawal agreement, and that is the message he has been giving to leaders when
he has spoken to them on the telephone so far”.
The prime minister has yet to speak to Irish prime minister Leo Varadkar since he entered Downing Street last Wednesday, nor has he accepted invitations to meet French president Emmanuel Macron and German chancellor Angela Merkel.
